Canadian retirement age pushed back to 68: study
Canadians know they have a ways to go when it comes to retirement planning.
After all, the just-passed RRSP deadline also doubles as a brutal reminder of our savings inadequacies. Only 39 per cent had even planned to contribute this year, meaning, unfortunately, Canucks aren’t exactly Warren Buffett on ice.
But while we’re not planning for retirement on time, we still plan on retiring on time, right? Right?
According to a new study from Sun Life Financial, maybe not.
The survey, released Tuesday morning, shows that Canadians now plan on retiring at the age of 68, three years later than our goal age in 2007.
Such a number might be a slight overreaction to the ongoing recessionary recovery – sort of a, “What? Retirement? Who could think of retirement at a time like this?” thing – but perhaps the downturn has also adjusted our realistic expectations of life after work.
Of course, money still talks. By the Sun Life study, 65 is still the projected retirement age for those making more than $100,000 each year, but for those earning less than $50,000, it’s now 70.
Considering the average Canadian salary is only $42,988, it might stand to reason that the recession has come as a nasty wake-up call. Maybe 65 was an unrealistic retirement age for the majority of Canadians this whole time.
After the downturn, now that you’ve had a chance to re-evaluate your finances, do you still feel you’ll be able to retire on time? If not, how much longer will you have to work?
By Jason Buckland, MSN Money
Posted by: Cindy Knat | Mar 8, 2022 3:46:43 PM
I hate to say it but how can we middle class save anything for our retirement when the prices of everything is going up especially the when the HST has been added to our bills and increase in property taxes have also gone up, groceries bills have also gone up and that is just a few that is added to our lives. Does McGuinty care, not all he cares about is digging our eyes out and filling their own lives. Well he is one politician I hate
Posted by: Joe | Mar 8, 2022 7:14:26 PM
Retirement is an individual choice and there is no magic age. I plan to continue to work because I can not because I have to. Too many hours in the day otherwise.
And that $42,000 figure is nonsense since it includes students, part timers and cash only workers. The average wage is Canada is much higher. Check your facts.
Posted by: Dan | Mar 9, 2022 12:40:09 AM
Cindy. You are correct, cost of living has gone up dramatically more than salaries especially recently -- see aldo the gas pump prices... add the potential of HST. Policitians always promise what the masses want before they're elected but none usually follow thru once in office. The more things change the more they stay the same (or worse :( )...
Posted by: Chip | Mar 9, 2022 4:43:53 AM
Complete crock !!! When I began working full time in 1971, my monthly TAKE HOME pay was $216.00.... which equates to approx. $2,600. net per year. I NEVER made 6 figures in my career and still retired at age 58. Then again, I didn't amass a krapload of credit card debt, didn't pay $150.+ each month for 360 TV channels I don't watch or text message and cellphone myself into virtual bankrupcy. Didn't buy or lease a new car I couldn't afford either. When I was only making 38K per year, I bought a house with a $10K downpayment from my SAVINGS account. YES... those types of accounts still exist !! Ohhh... and here's another hint. I also put money away in RRSPs and after my retirement... guess what ? I paid myself a new 2011 SUV in CASH... and am now spending 3 months in the Flloridian sunshine.
Posted by: josh | Mar 9, 2022 5:11:02 AM
Wow, Chip sounds like he knows how to do things, kids nowadays should follow his example exactly. You know, live in a country with equitable taxation of people and businesses, grants for university education, cheap housing, lots of good paying blue collar jobs and few environmental controls. While we wait for that to happen perhaps Chip can try living our projected future. Pay the full cost of your healthcare, don't get a pension and be saddled with massive taxes required to pay for the retirement of a huge number of people who retired before you, only have 1 child because both parents have to work to cover the hugely inflated house prices and carry a massive university debt into retirement because it's not possible to get a decent job without a degree.
Posted by: sean | Mar 9, 2022 8:14:12 AM
It's the dam Goverment everywhere grocery's , gas, car insurance HST and it goes on they should fire Flatery he's a nut and Harper he's no different.... 65 should be the time to retire and enjoy life 68 is way to much and long that is crazy..
Posted by: Quarmby | Mar 9, 2022 8:40:42 AM
Unless of course if you are an uncivil servant....then you can retire with a fully indexed pension at 50....which I get to pay for by working to 80! Then there are the politicians, who thankfully have adjusted their pensions to be inline with the "real world"....they have to put in a full 6 years at the trough before they are allowed to collect their fully indexed platinum pensions...plus of course the standard salary from the Senate, when inevitably they are given an unbiased appointment to that particular double dipping cesspool of sub humanity, in recognition of all they didn't do (or did to) for Canada! Panama is looking very good right now.....
Posted by: john | Mar 9, 2022 9:07:24 AM
I don't know anyone who "wants" to work past 65, those that do work because they overspent, got into severe debt, many still paying a mortgage past 70's. Could this also be propaganda for future Govt. to extend the Old Age Security past 65 ? I plan to retire at 50 all on my own, now there! Early retirement for me, work is for the birds. I have many hobbies and supportive Family, work is overrated bigtime.
Posted by: Trixie | Mar 9, 2022 9:46:50 AM
Congratulations Chip! I agree with you wholeheartedly. I thought I was the only person out there that thinks like that. Finally, someone else.
I also can't believe how some people spend. In my opinion, it's outlandish.
I doubt I"ll ever make as much money as a male, however, I think I will be retiring comfortably, without extravagant holidays, which is just fine with me, at 65.
Simply watching my cash flow is all.
Posted by: sjrw11 | Mar 9, 2022 10:31:01 AM
I was planning to retire at 66. I turned 65 on July 21st, 2010. My job was outsourced to India, and my last day of work was Sept 3rd, 2010. Looks pretty bleak right now, but I have a roof over my head and food in my stomach.....That puts me way ahead of 90 % of the people on this planet. Be thankful for what we have.
Posted by: carl | Mar 9, 2022 10:38:21 AM
I think that the 42,000 /year is about right and if we look at the real amount that is available after all the income and hidden taxes we are left with very little to actually save for retirement. Furthermore since Flathery lied to us all by promising not to touch the income trusts and then reversing his decision and taking 20+ billion out of the equities putting a lot of the pension funds scrambling. Since then the market has rebounded some but the pension plans are grossly underfunded because the previous investment returns have been slashed. If you have and investment paying you a $ 100 dividend per year and all of sudden that dividend is slashed to $20 per year you're going to require the injection of more money to get a $100 if that is what you need to pay out. This government has covertly undermined the middle class and I don't think they'll rest until they wipe it out. In their mind there should be two classes of people, the rich and the poor, that's it
Posted by: Guy D | Mar 9, 2022 10:41:56 AM
Trixie & Chip I agree with you both. I also started full time work in 1971 at $4,800 per annum. Worked for 36 years and retired at 55. Ill be 60 this year and have applied for my CPP to begin immediately upon qualifying this year. While I worked full time I went to university part time and paid out of pocket. In 1972 I bought my first house. A house can be like a bouy against inflation. The down payment came from money I saved working in tobacco as a primer for three summers. While I worked my civil servant job I bought more property and did renovations. I do have an indexed pension-sorry! I retain some rental property and dividend paying equities. My wife and I drive a 1999 and 2000 vehicle. They work great. It costs me about $1000/ month for food, restaurants and alcohol, $1000 runs the house including taxes and $500/mo pays for gas, insurance and maintenance on the vehicles. My point is that $36,000 net allows you to live comfortabley in retirement. I still work at renovations, manage investments, help friends and family so that they to can get ahead and retire earlier. Travel costs extra but a nice B&B is 60Cdn in Paris, Vienna or Brussels. I pay $55 per year at an Optimist Club for a year of racquet sports, volleyball and a number of other sports Im too busy to engage. My point: Don't complain. Make a plan to stop the unneccesary bleeding, exercise patience in your financial plan. Talk to successful people and use their advice. Beware of anyone who stands to gain from the advice they give you.
Posted by: John | Mar 9, 2022 10:54:18 AM
The average wage in Canada is $42,000 and that does not include part time workers. That is $20 an hour.
Posted by: carl | Mar 9, 2022 10:54:36 AM
I notice Chip that you neither mentioned having a wife and family and there was no mention of putting kids through university either. I would like to know if most people are making 2.65 times yearly what they made in 1980 because that is what it would take to keep pace. So the 42000 previously mentioned would mean an annual salary of 15,849. During that time Corporations in this country paid a much bigger proportion of taxes in this country and now its flip flopped. Our real tax amount has increased significantly since 1980. I know this because Mulroney brought in a more streamlined tax system in those years and I ended up paying 1500 extra in total taxes on the same salary before and after the change. That was the start of the tax burden flip flop. Now if you consider that had I had the extra 1500 per year to place in a RRSP I might well be retired now. And I've not earned six figures either.
Posted by: Al | Mar 9, 2022 11:01:36 AM
First governments need to be held accountable for spending. We need a politicians at the federal and provincial levels who's primary focus is reducing taxes through the elimination of waste in how our government spends money. I don't live in Toronto, but look at how much miss management they are finding over there now that someone is focussed on looking at spending.
Second, we have to look at ourselves. The average cell phone plan out there is in the $50/month range if not more. Cable/Satellite, Internet probably cost another $100/month minimum. Then there are costs from owning multiple car's, a larger than needed home and most importanly costs to finance debt. I believe it would be very easy for the average family to find $250/month should they focus on cutting out some of the excess. Unfortunately we are a society of buy now and pay later thanks to credit. This has driven up our desire to waste money on things which would normally be beyond our means. It's always easy to blame someone else, but the number one cause is our behaviour. We must address this first!
Posted by: Axel | Mar 9, 2022 11:39:33 AM
Good comments. I'm close to retiring too. Only 15 more years to go. I was concerned, but managed to have a job that provides a company pension. Watch your debt load. Many peoplr think you need tons of money to retire, but what about the opposite mentality...pay your debts before retiring??? I figure pay your mortgae, get your debt load cleaned up. I know so many people in their mid-thirtys, they rent an apartment, lease a car, rent their furniture in their apartment... and have 10's of thousnads racked up in credit card debts from TRIPS and vacations. Now THERE'S a brain hard at work!!!
If i had $150,000 in the bank, and it earned me $120 a month in interest.... OR if I used to $150,000 to pay out a mortgage, which saves me $1200 a month.... same amount of money doing 10x the amount of work. Those are my views on it.
Posted by: YK | Mar 9, 2022 12:15:58 PM
Here's to Chip!
I'm 48 - I have two kids - I will be putting them through University - I own outright EVEYTHING! No mortgage - no car loans. I own my house, three vehicles - a travel trailer and a boat.. No debt... Hmmm - How can that happen -I must make tons of coin... NO way! My wife and I manage our spending - We paid down our house as fast as possible - When we were young we took few and very inexpensive holidays - we recycle - we never pay interest on VISA cards - We bought only what we needed and not what we wanted when we were first married. Yeah - it hurt when some of our friends bought fancy TVS or went on Mexico vacations etc... But now - who's laughing? I got over $500,000 stashed away in investments and no debt... Now I go to Mexico every year for 2 weeks and still stick money into my RRSP and investments.... I will retire in 8 years and never worry about $ again for the rest of my days! The rule I give to my kids " You can pay now or you can pay later - But you are going to pay... So sepnd in your youth or work in your late years - but then don't complain that you didn't manage your $ inyour youth!
Posted by: dr boyle | Mar 9, 2022 12:17:46 PM
Chip and Trixie are right and should be admired. Too many people want it all, want it now, are willing to go into debt to get it, then live in fear of losing it all, while working at a job they don't like, to buy stuff they don't need, to impress people they don't know. Get all the essentials paid for by age fifty, then arrange for an income at or below that which is taxable...interest, dividends, payments from insurance, even from principal. Live a healthy lifestyle ... have fun.
Posted by: YK | Mar 9, 2022 12:40:06 PM
One more thought on saving $... The old saying was a penny saved is a penny earned... but you don't pay tax on money saved and you do on $ you earm - So each dollar you save is worth approx. $1.35 of earned $.... assuming a tax rate of approx. 35%... So work on saving $ (by not spending it) it's worth more than putting in extra hours to earn that $.
Posted by: Chip | Mar 9, 2022 1:09:51 PM
Thanks Trixie, YK, dr.boyle and a few others. At least similar people have the same point of view. As for Carl... NO I never had children and was married 1 time and we rented. I bought my house on MY own... paid my bills, my credit cards, property taxes, furniture, made renovations on MY own. Didn't have a spouse to pay 1/2 or even a portion of it. I was also laid off in 1998 and didn't collect EI for 12 months... I got a job as a courrier delivering packages until something better came along and I could get back on the road to financial stability. Second income ? When I felt I needed a new (used) car or other expensive toy... I'd get a part-time job for a while. Those also exist, if ya look for them and make the extra effort. My dad did it... so did I. It's not rocket science... it's called living within your means and knowing how to budget properly. Bottom Line: If ya can't afford to pay for it... maybe ya shouldn't buy it... even less putting it on a credit card and paying the minimum monthly charge.